$5 billion: Virgin float offer swamped

Virgin Blue's public share offer has tapped into growing interest in the sharemarket, with applications of more than $5 billion for only $558 million of stock.

Investors apparently shrugged off any concerns about a threat to Virgin's growth plans and sharemarket float from Qantas's fledgling discount offshoot, JetStar.

Virgin claims its public offer closed more than 10 times oversubscribed and at the top of its price range.

With Virgin Blue set to start trading on the Australian Stock Exchange with $2.3 billion market capitalisation, the two questions lingering yesterday were whether Sir Richard Branson would reduce his 29.1 per cent stake, and what publicity stunt the Virgin founder had in store for Monday's listing ceremony.

Sir Richard hinted that he might well increase the shares available through the float to 29 per cent of Virgin Blue, which would cut his interest to 25.1 per cent, when he paid credit to the "250 institutions worldwide and many thousands of our customers" who applied for shares.

"Although we have been told by our advisers that demand was over 10 times subscribed at the $2.25 price, we have decided not to price the offering any higher to hopefully allow for a decent aftermarket for the many staff and supporters of Virgin Blue," Sir Richard said in a statement.

With the float costing Virgin Blue about $20 million, advisers Goldman Sachs JBWere and Credit Suisse First Boston will get 2.5 per cent of the funds raised plus a 0.5 per cent bonus, worth an estimated $16.7 million.

But aside from Sir Richard, another Virgin Blue shareholder set to wake with a big grin on Monday is the airline's chief executive, Brett Godfrey, whose 34.75 million shares will be worth $78 million.

While Patrick Corp is set to hold its 45 per cent stake in Virgin Blue, the airline added that even if Sir Richard sold down his stake, he "will continue (his) strategic mentoring, advisory and promotional role" with the three-year-old airline.

Amid talk that yet another of Sir Richard's stunts could involve him donning a blonde Afro wig some time on Monday morning, Patrick Corp's less-peacockish managing director and Virgin Blue chairman, Chris Corrigan, continued to avoid comment on his plans for the airline, namely whether he planned to lift his stake.

With Virgin's New Zealand-based carrier, Pacific Blue, set to start its trans-Tasman services between Christchurch and Brisbane in late January, commercial manager David Huttner also shrugged off concerns that the airline was yet to receive operating certificates from New Zealand regulators.

While Pacific Blue is also yet to gain the necessary regulatory approval to fly extended-range twin-engine operations (ETOPS) across the Tasman Sea, Mr Huttner said he was confident the airline would gain the necessary paperwork in January.

He said "there's no question" Virgin's three Pacific Blue 737s would be well utilised here before heading across the Tasman.